if i could buy a single FTSE 100 share it would be this
If I had to choose just one FTSE 100 to buy back all the UK stocks I have, I would acquire HSE (LSE: SSE).
There are several reasons why I would choose this company over any other. It operates in the relatively stable utilities sector, offers investors an attractive level of income and has the potential to achieve impressive earnings growth over the next decade.
While other UK stocks on the FTSE 100 could generate better income or growth investments, I think SSE offers the best of all worlds. That’s why I would buy the stock rather than another today.
Growth Stock FTSE 100
The SSE generator set and grid operator plays a vital role in the UK economy. It supplies energy to millions of homes. Unlike other sectors, this is a very defensive activity.
Consumers will always need energy. The demand is not subject to fashion trends and it is relatively resistant to economic cycles. As such, SSE’s investment plans span decades. This is good news for investors. There is a very good chance that the company will still be providing energy to its customers in 20 years.
Therefore, it is highly likely that the stock will still generate profits for investors 20 years from now. This is really the main reason why I would buy SSE rather than other UK stocks on the FTSE 100. If I were to own a company for the next two decades, I think there is a good chance that the activity SSE is always there.
The management is currently ensuring the sustainability of the company. He wants to triple the company’s renewable energy production by 2030.
To this end, SSE sells 2 billion pounds of non-green assets while seeking new opportunities. He submitted a bid to develop Denmark’s largest offshore wind farm and formed an Iberian partnership to develop his expertise in renewable energy overseas. In addition to these international efforts, FTSE 100 has the largest wind farm pipeline in the UK.
SSE aims to invest up to £ 15 billion in these growth initiatives over the next few years. In addition to this potential for earnings growth, the stock also offers a 5.6% dividend yield.
While I would buy SSE for the next two decades, there are challenges the company may face as we move forward. The utilities sector in the UK is highly regulated. If regulators decide to take a hard line with suppliers, it could impact profits.
In addition, SSE relies heavily on debt to fund its capital expenditure plans. It currently has around £ 9 billion in debt and may need more to support its large renewable energy projects. If creditors do not cooperate, SSE’s growth plans may fail. To free up money, the company may be forced to reduce its dividend.
Even after taking all of these risks and challenges into account, I still think this is one of the best UK stocks on the FTSE 100 to buy right now.
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Rupert Hargreaves does not have a position in any of the stocks mentioned. The Motley Fool UK does not have a position in any of the stocks mentioned. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations that we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a diverse range of ideas makes us better investors.